Recent trends in European imports of wood furniture need to be seen against the background of rapidly increasing demand, irregular availability of supplies from many countries, sharply increasing prices across the board, and efforts by European retailers to mitigate risks by diversifying supply sources.

From the trade data, it is clear that a very large increase in the value of wood furniture into the EU27+UK followed on immediately from the more minor dip during the early stages of the pandemic in the first half of 2020.

In fact, the 12-month rolling total level of imports was close to US$10 billion by the end of October last year, which compares to less than US$7.5 billion just before the pandemic in the opening months of 2020.

The rise in import value was partly driven by increasing product prices and freight rates. The average unit value of EU27+UK wood furniture imports increased from US$3030 per tonne in the first ten months of 2020 to US$3460 in the same period last year. However, import quantity did rise from 2.4 million tonnes in the 12 months to February 2020, just before the onset of the pandemic, to nearly 2.9 million tonnes in the 12 months to October 2020.

In the first 10 months of 2021, the EU27+UK imported US$2.08 billion of wood furniture products from tropical countries, 36% more than the same period the previous year. While a significant rise, it should be noted that, for tropical countries, around two thirds of the gain in European import value was due to price increases and rising freight rates.

EU27+UK import quantity from tropical countries in the first 10 months last year was 523,000 tonnes, only 14% more than the same period the previous year. Import quantity from tropical countries for the whole of last year is projected to be around 600,000 tonnes, no more than the long-term annual average between 2015 and 2019.

The rise in import value of wood furniture from tropical countries last year also pales in comparison to the rise in import value from China. In the first 10 months of 2021, the value of EU27+UK imports of wood furniture from China totalled US$4.34 billion, 50% more than the same period the previous year.

Import quantity from China was also up over 50%, at 1.25 million tonnes. Imports from China have benefitted from more reliable shipping and higher availability of containers compared to tropical countries in Southeast Asia. One legacy of the US-China trade dispute has also been to increase China’s focus on exports to the European market as exports to the US have declined.

The gains in EU27+UK imports of wood furniture from other Lower and Middle Income (LMI) countries in nontropical regions also exceeded the gains made by tropical countries. Import value from non-tropical LMIs in the first 10 months of 2021 was US$1.50 billion, 47% more than the same period the previous year. Import quantity from these countries increased 37% to 606,000 tonnes.

Major gains in EU27+UK import value of wood furniture from tropical countries in the first 10 months of 2021 were made by Vietnam (+30% to US$820 million), Indonesia (+40% to US$430 million) and India (+72% to US$370 million). Import growth from Malaysia was more moderate, rising 16% to US$200 million.

The signs are that Indonesia is seeing some benefit from the commitment to market development in the EU building on industry-wide SVLK certification and being the only country offering FLEGT licenses. Suppliers in India, most of which are selling craft products into the EU27+UK, are benefitting from the development of innovative on-line sales channels like that described earlier for Artisan Furniture.

The slightly slower rate of increase of EU27+UK imports from Vietnam is probably only a reflection of supply bottlenecks, particularly as Vietnam is also now shipping vast quantities of wood furniture out to the US.

Of non-tropical LMI countries, EU27+UK imports of wood furniture increased particularly strongly in the first 10 months of 2021 from Turkey (+56% to US$400 million), Ukraine (+64% to US$280 million, Bosnia (+30% to US$240 million) and Belarus (+59% to US$230 million).

These countries in the European neighbourhood have been major beneficiaries of supply and logistical problems in more distant supply countries. One sign of this was the announcement by IKEA in October last year of a plan to shift more production to Turkey to shorten the supply chain, and minimize problems associated with rising shipping costs and lengthening delivery times from other parts of the world.

The UK is by far the largest European importer of wood furniture from Low and Middle Income countries, importing 83% more than the next largest, Germany, in the first ten months of last year.

During that period, imports by the UK increased 51% to US$2.37 billion, although this followed a particularly large 12% fall the previous year.

In the first ten months of last year, there was also a large increase in wood furniture imports from LMI countries into all the leading markets including Germany (+40% to US$1.29 billion), France (+36% to US$940 million), Netherlands (+36% to US$700 million), Belgium (+52% to US$410 million), Poland (+57% to US$320 million), Spain (+54% to US$310 million), and Italy (+42% to US$230 million)